Interactive resources for incubators and accelerators
Interactive resources for incubators and accelerators
Interactive resources for incubators and accelerators

Impact Measurement 101

This section provides an overview of the key terms and concepts of impact measurement within the context of social enterprise ventures. It looks at why impact measurement is important for the ventures that you support, and identifies some of the key questions that you can start asking your ventures to begin them on their impact measurement journey.

  • Learning about impact measurement is much more than just learning about relevant metrics and applying them to your model – it has to come from deep within the organisation.

Why is Impact Measurement Important for Ventures?

As incubators or accelerators, we are in a great position to help build an effective impact plan with the ventures that we support.

Impact measurement can be used to help ventures to:

  • Plan: Know where you want to get to and have a plan to get there

    Refine the focus of activities by clarifying the change you want to make.

     

    An Impact Strategy gives you clarity around the direction you are going and what you are trying to achieve. Your strategy should contain a Theory of Change (ToC), which is a theory for how the activities you do lead to positive impact. Your impact strategy links directly to your purpose, the change you are trying to make in the world. Working together with your business plan, an impact strategy helps you make decisions, such as how to invest your time and energy. It can help you stay on track when distractions come along and it can help you when you need to consider whether or not to pivot a business.

  • Deliver: Follow your plan and make good decisions along the way

    Having an impact plan helps you deliver better services and achieve the outcomes you want. You do more of what the evidence is saying is working and do less of what isn’t working. You can also support community partners who are not proving their impact to measure and communicate their impact better.

  • Partner: Partner with a variety of people and organisations

    Partner with the people who are experiencing hardship to determine what your goals should be. Partner with funders and consumers. Partner with the community and the stakeholders as key partners for change. You aren’t doing something to people, you are doing something with them. This is a very important distinction.

     

    There is a partnering spectrum. Some partners just need to be informed about what you’re doing, others need to be more actively consulted while others need to be empowered by being directly involved in program design.

     

    An important step is to look at their goals:

     

    – Have you clearly understood your stakeholder’s goals? What process have you gone through to understand their goals? They might have the answers and they might have the resources to solve the problem with your support

    – How involved in the decision making are they? Are you just consulting them, or are you truly involving them in the decision-making process? How will you check back in with them that you are meeting their expectations?

    – Think about who you could collaborate with. Partners may also involve the government. They may be a source of data, a critical part of creating the impact, or a funder. Consider the IAP2 Spectrum of Public Participation (The IAP2 Federation has developed the Spectrum to help groups define the public’s role in any public participation process)

  • Measure: Know what to measure and which measurement frameworks to use

    Your theory of change shows you what outcomes to measure. You can use indicators to measure whether those outcomes have been achieved or not. A ToC forms the backbone of an Impact Management Framework.

     

    Where possible, you should align your impact measurement with existing frameworks such as the UN Sustainable Development Goals or the Global Impact Investing Network Indicators.

     

    Sometimes you have to use proxies. i.e. There is evidence to show that if (A) happens there is a high chance the result is (B), but we measure (A) because sometimes you can’t measure the thing you want to change directly. 

     

    For example, climate change is hard to measure directly, but we can measure other things such as the size of polar ice caps.

  • Prove: Prove to stakeholders and others that you are having the impact that you intended

    Proof is important to funders and stakeholders to show you are worth supporting (and also good for your own team). Proof can be hard to achieve, sometimes the best you can do is a credible logic model supported by measurement and research → give them the confidence that you are on track to achieving the long-term impact. Logic models based on credible research, and use of proxies, can help.

     

    If you are collaborating, best to assess and figure out at the beginning. Collective impact framework – have shared measurement. Measure the same things in partnership.

  • Improve: Understand what is working and what isn’t

    Understand where to put your focus. Understand what you may need to change.

     

    You may identify factors that contribute to increased impact.

     

    For example, marketing your service at a certain time of year might prove more effective in increasing your impact.

     

    By looking at these differences, you can identify who you should focus your efforts on.

     

    You may also find that you aren’t achieving the change you want to. If this is the case, you can work out where the difference is between your model and the real world so you can address the problems. Thinking about all of these things means your organisation will have a learning culture that responds to signals and adapts to ensure the greatest impact is achieved.

  • Communicate: Tell your impact story and use it as a point of difference

    Make sure you can back it up with data.

     

    Your impact story is important to who you are as an organisation. It is the key reason why you exist. Your impact is what makes you different from many of your competitors. It is your secret weapon, so use it to your advantage. Make sure you can back up your claims. If you become successful, people will challenge your claims about impact, so you need to have data and metrics in place to be able to justify your claims (and protect from criticism). Remember to focus on your impact, not your activities. Talk about the change you enable, not the things you do.

     

    People, particularly younger ones, are increasingly looking for jobs that create meaning in their lives as well as in the world around them. As a social enterprise (or impact accelerator program), talking about the story behind your enterprise and the change you want to create in the world helps to attract talent that you might not otherwise be able to. And once you have the talent you need to run your business or organisation successfully, you need to ensure that your employees feel like they have value within the organisation and are contributing to the greater mission and goals.

Understanding Attribution vs Contribution

Attribution is where you claim that the impact happened solely due to your intervention.

Contribution is where your work is one of many factors that led to the impact.

Generally, in an impact framework, we are looking at contribution, but this isn’t an easy out. You still need to be rigorous in thinking about what your contribution is and how big a factor that contribution has been in the impact seen.

  • An impact model or plan is an essential part of being a social enterprise. If you can’t demonstrate you’re having a positive impact, you’re not a social enterprise.

Impact Plan

In order for an impact-driven venture to be sustainable, they require both a business plan and an impact plan. While the business plan helps to create financial sustainability, the impact plan helps to refine a venture’s focus, identify what impact or impacts it wants to create, and outline an approach for how they will get there.

A venture’s impact plan links directly to their purpose and the change that they are trying to make in the world. Working together with their business plan, an impact plan helps a venture make key decisions such as where to invest their time and energy, what to focus on, and when (if ever) to pivot their business.

Impact Management

Impact management for your ventures involves three key elements that are repeated and refined in a continuous cycle.

  • 01.

    Strategy

    The development of a theory of change that aligns with business model and strategy

  • 02.

    Measurement

    Defining clear outcome indicators, and designing data collection methods

     

  • 03.

    Management

    Reviewing learning and using insight to inform decision making

Reflection

The reason a venture has an impact strategy and is measuring what they are doing is so they can manage the social enterprise better in order to achieve that impact that is included in the strategy.

Impact Management Framework

An Impact Management Framework consists of a ToC, outcome indicators and data collection methods:

 

Theory of Change: Is a model that shows how the activities that an organisation delivers lead to positive social and/or environmental outcomes and impact

Indicators: In your framework there will be indicators that will let the organisation measure if it is achieving the key outcomes identified in the ToC

Data collection methods: The framework includes a plan for how the organisation will collect, store and analyse data on those outcome indicators

Key Questions to Ask Your Ventures

The first things a social enterprise should consider is:

ARE YOU WORKING TOWARDS THE RIGHT THING?

What are you working towards and would it be a good thing if you achieved that?

Your social enterprise may have established itself to run an activity and that activity seems like the right thing to do, but you do not have the clarity around what the ultimate impact you are trying to achieve. You might have multiple things you hope to achieve, but have not refined your focus to one. You may also have assumptions on what you think should change without talking to people who are affected by the problem.

For example, you’re trying to tackle homelessness without speaking to people who are homeless

Reflection

It seems simple, but many social enterprises haven’t asked themselves this question.

DO YOU HAVE THE RIGHT APPROACH?

  • Challenge conventional and traditional ways
  • Look at research
  • Have you chosen a good approach to help you achieve that good thing?

 

IS THERE A LOGICAL LINK?

There is a logic that when a basketball player shoots a basketball it will form a parabola, and if the basketball player lined it up right, and put the right force behind it (the good approach), that curve will ensure the basketball enters the hoop (the good results).

Can you describe the logic that links your approach with the good thing you are trying to achieve? Does the logic make sense?

Practical Tip

It is important for a social enterprise to:

  • Get clear on what their approach is
  • Be sure that they know what their goal is
  • Have a clear logic that links their activity to the ultimate goal

Activities and Outcomes

Historically, funders have funded social enterprises to undertake activities. More recently, the funding focus is shifting more towards outcomes.

For example, a venture may talk about running skills training but should be thinking about what change that training will create. Will the people involved be able to secure long-term jobs when they couldn’t before?

Reflection

A lot of organisations needs support in making the shift from activities to outcomes.

Intermediaries can support organisations to identify what their activity is, and then help them switch their thinking to focus on what changes because of that activity.

Important Definitions

The impact-space is filled with different terms and phrases that are often understood differently in different contexts.

For clarity, this is how some of the most common terms are understood within the context of this guide.

Terms

Definitions

  • Activity

    The activity conducted by the venture is the thing they do that will eventually generate impact. For some ventures this will be their main activity (e.g. training people), but for others it might be something that is separate to their business model (e.g employing people with disabilities).

    The activity conducted by the venture is the thing they do that will eventually generate impact. For some ventures this will be their main activity (e.g. training people), but for others it might be something that is separate to their business model (e.g employing people with disabilities).

  • Outputs

    The immediate result of an activity or intervention, such as the number of cooks stoves sold, or the number of training events held. They are generally easy to observe and count.

    The immediate result of an activity or intervention, such as the number of cooks stoves sold, or the number of training events held. They are generally easy to observe and count.

  • Outcomes

    The changes that occur for individuals, groups, families, organisations, systems, or communities during or after an activity are outcomes. These are often changes in people’s well-being such as health, education and income. Outcomes  can also include changes in attitudes, values, behaviours or conditions.

    The changes that occur for individuals, groups, families, organisations, systems, or communities during or after an activity are outcomes. These are often changes in people’s well-being such as health, education and income. Outcomes  can also include changes in attitudes, values, behaviours or conditions.

  • Short-Term Outcomes

    The most direct result of an activity, typically not ends in themselves, but necessary steps toward desired, longer-term outcomes ends.

    The most direct result of an activity, typically not ends in themselves, but necessary steps toward desired, longer-term outcomes ends.

  • Medium-Term Outcomes

    Link an activity’s short-term outcomes to long-term outcomes.

    Link an activity’s short-term outcomes to long-term outcomes.

  • Long-Term Outcomes

    Result from achieving short-term and medium-term outcomes, and lead to the ultimate impact.

    Result from achieving short-term and medium-term outcomes, and lead to the ultimate impact.

  • Impact

    The culmination of the positive social or environmental outcomes that happen because of what a venture does.

    The culmination of the positive social or environmental outcomes that happen because of what a venture does.

  • Indicators

    Measurable markers that show whether progress is being made on outputs or outcomes. Different indicators are needed to determine how much progress has been made toward a particular output, outcome or impact.

    Measurable markers that show whether progress is being made on outputs or outcomes. Different indicators are needed to determine how much progress has been made toward a particular output, outcome or impact.

  • Measurement

    Ccollecting data on your indicators. Measurement can be done via various manual or automatic methods such as surveys, electronic measurement or interviews.

    Ccollecting data on your indicators. Measurement can be done via various manual or automatic methods such as surveys, electronic measurement or interviews.

  • Evaluation

    The examination and exploration of what your measurement and data collection is telling you about your impact.

    The examination and exploration of what your measurement and data collection is telling you about your impact.

  • Assumptions

    Helps you to state what the basis of your model is and why you think the model will flow as it does (also can help you think of barriers, roadblocks, and external factors that could affect your model).

    Helps you to state what the basis of your model is and why you think the model will flow as it does (also can help you think of barriers, roadblocks, and external factors that could affect your model).

Next:

Theory of Change

How to create a story of the impact of your ventures using the ToC tool